Finding Text
Finding 2022-001 ? Review of Disbursements WIOA Cluster - Assistance Listing Number 17.258, 17.259, 17.278 Significant Deficiency Criteria Internal controls should be in place that provide reasonable assurance that disbursements made for expenses under the WIOA Cluster of programs (the programs) are supported by valid documentation and are adequately reviewed and assessed, with clear evidence of the review. Condition Certain program disbursements were made for expenses not supported by valid documentation as a result of forged approval forms and fraudulent invoices. Cause While there are currently procedures in place for the review and approval of disbursements for program expenses through the various other programs provided by Children and Families of Iowa, the procedures for these specific programs were non-standard due to the nature of the programs. The paper approval process utilized for these programs as well as the process used for employee reimbursement of program expenses were both highly manual processes. This resulted in the exploitation of these highly manual processes in the form of forged approval of expenses that were not legitimate program expenses and submission of fraudulent invoices for employee reimbursement. Effect Program resources were disbursed for non-program related expenses. Recommendation Procedures should be implemented requiring the verification of the participant?s status in the programs, along with the requirement that the review and approval process include the wet signature of a reviewer who is independent of the request for disbursement. The process for reimbursement of employees amounts expended for the programs should be made more automated and controlled so employees are not afforded the opportunity to submit fraudulent invoices for reimbursement. Views of Responsible Officials Children and Families of Iowa implemented additional procedures in June 2022 related to disbursements. All disbursements for participant expenses in these programs are now subject to three levels of review, including a quality assurance specialist review. The review process also includes an assessment of the status of the participant in the related program, an assessment of the need for the expense, and an assessment of whether or not the expense qualifies based on the approved local plan and spending limits. Wet signatures are now required for all three levels of review. Additionally, company credit cards were issued to program directors to minimize the need for personal expense reimbursements, with the approval of expenses on the credit cards eventually moving to a password-protected on-line environment. These additional procedures will continue to be refined as needed in order to reduce the potential risk of inappropriate disbursement noted. Conclusions Response accepted.